Employment Agreements for Designers

If a design firm hires you for a staff position, you'll be given
some form of written employment agreement. In small firms, the
agreement may be rather short. In larger firms, it will probably be
a more detailed document. This articles addresses some basic issues
related to employment agreements, as well as extra components that
you may encounter.

The basics

U.S. law doesn't require companies to have formal, written
contracts with their employees. However, using a contract can be a
good idea, especially for senior-level positions, because it sets
forth the terms of your relationship.

In most instances, the agreement will begin with your job title
and starting date, a brief description of your job
responsibilities, your base salary and an explanation of the
company's payroll schedule (such as bi-weekly or semi-monthly),
along with a very general overview of the benefits being provided
(such as whether or not there is a group medical plan in
place).

The agreement should include clarification of your employment
status (temporary or regular, part-time or full-time, and exempt or
non-exempt from overtime). Unless the company is unionized, your
agreement will not be for a fixed period of time. Instead, it will
include a statement of “employment at will.” This means that you
can be fired at any time and for any reason, as long as the reason
is not illegal. Similarly, you have the right to resign at any time
for any reason.

You will also be asked to acknowledge that all original work
produced within the scope of your employment will be considered
“work made for hire” under U.S. copyright law, please see the
earlier article about Intellectual property, (March 2005). The
standard definition of work-for-hire is a work created by an
employee as part of his or her job. Copyright belongs to the
employer, who is recognized as the legal author One implication of
this is that a departing employee should always ask before taking
anything that might be considered intellectual property. Even
though you have created something, you need your employer's
permission before you can add it to your portfolio.

Chances are that your contract will also include a nondisclosure
section to protect confidential information and trade secrets that
you will learn about your employer's company and about your
clients' businesses.

In addition to these basics, design firm employment agreements
often address a number of other issues, including the
following:

Exclusivity

Generally speaking, it's legal for you to work more than one
job. However, your employer does have the right to limit
after-hours work that is in conflict with its own business. Your
employer may want to be the only company for which you perform
creative services. Moonlighting for a competing creative firm, or
perhaps directly for one of your employer's clients, could provide
grounds for discipline or discharge.

Your agreement may specify a method to be used for resolving any
legal disputes. As part of a growing trend, many creative firms ask
employees to give up the right to sue in court over issues such as
wrongful termination, breach of contract and discrimination. If you
sign an agreement that includes an arbitration clause, you're
promising to pursue any claims against your employer through
arbitration, rather than through a lawsuit.

Noncompetition

Some design firms ask departing employees to agree not to enter
business in direct competition with them. This could be included in
an employment contract or set up as a separate agreement. However,
the creative firm cannot unreasonably restrict a departing employee
from earning a living. For this reason, noncompetition agreements
can be difficult to enforce in some states unless the restrictions
are very narrow in terms of time period and geographic area. (It's
important to note, however, that noncompetition agreements are
routinely upheld if they're part of a contract for the sale of a
business.)

Acceptance

At the end of the document, there will be a place for you to
sign. When you do so, you indicate that you've read the contract,
understand it and accept it.

Changes

Once a signed contract is in place, it limits the design firm's
ability to alter the stated terms and conditions of employment. To
make changes, it's necessary to re-negotiate the contract. For this
reason, most employment agreements do not go into great detail
about anything that's quite likely to change over time. For
example, the exact details of the group medical insurance policy
would change if the plan were moved to a different insurance
provider. This is a common occurrence. In areas not addressed by
the contract, and in situations where employees work without
contracts, the employer generally will have much more freedom to
make unilateral decisions and implement changes without having to
negotiate.

About the Author:

Shel Perkins is a graphic designer, management consultant and educator with more than twenty years of experience in managing the operations of leading design firms in the U.S. and the U.K. He has served on the national boards of AIGA and the Association
of Professional Design Firms. He has been honored as an AIGA Fellow "in recognition of significant personal and professional contributions to raising the standards of excellence within the design community." The third edition of his best-selling book, Talent
Is Not Enough: Business Secrets For Designers, is available from New Riders.